Hype Equals Rally: Bitcoin’s New ATH at Nearly $65k Only 220% Above 2017 Peak
Compared to 1,578% of 2017 and 3,590% of 2013. Also, in the “inefficient” crypto market, the clear trade is often the good trade.
This week, ahead of Coinbase listing today, the price of Bitcoin rallied to nearly $65,000 on the largest cryptocurrency exchange in the US.
Up 120% this year, so far, BTC is currently trading above $64k and aiming for $70k with June contracts already trading at this level.
“The lowest 30-day volatility since October tells us Bitcoin is ripe to exit its cage and continue in a bull market on its way to the next $10,000 move,” according to Mike McGlone, Bloomberg Intelligence commodities strategist who recently said BTC could hit $400k this cycle.
“Similar to Tesla’s equity-wealth allocation to Bitcoin, the Coinbase IPO may add to the growing list of 2021 crypto-validation milestones.”
With this latest uptrend, futures open interest on major exchanges has reached a record high of nearly $30 billion, with the highest on Binance at $5.16 billion, while on CME, it is above $3 billion.
While the Bitcoin price has rallied 1,610% from March lows, BTC is only 225% above its 2017 peak of $20,000. In comparison, the 2013 peak high to the 2017 ATH was an uptrend of 1,578%, while the 2011 peak high to the 2013 ATH was a 3,590% gain.
“Small sample size but still looks like we are far from the top,” noted trader Josh Rager.
And besides the Coinbase listing, there is plenty of demand for BTC, as evident in the growing interest in the first North American Bitcoin ETF, which surpassed $1 billion (C$1.38 billion) in assets. BTCC, which saw more than $165 million worth of shares exchanged on its first day of trading in February, currently holds almost 17,500 BTC.
The Obvious Trade Is The Good Trade
Much like Bitcoin, Ether, and the entire cryptocurrency market, crypto-exposed stocks like Riot Blockchain and marathon Digital Holdings also advanced. ETH -0.24% Ethereum / USD ETHUSD $ 1,846.44
-$4.43-0.24% Volume 5.26 b Change -$4.43 Open $1,846.44 Circulating 120.23 m Market Cap 222 b 1 y Coinbase Predicts Substantial Growth of Newer L1 Chains & Institutionalization of Regulated DeFi 1 y A Possible Crypto Recovery Moving Into New Year, Risk-on Sentiments Send The Stock Market to Another Record High 1 y The Sandbox Game Is Migrating to Ethereum Sidechain Polygon and Launching A DAO in 2022
While some are feeling wary about the Coinbase listing, expecting it to make the local top, the majority of the market sees it as a catalyst to send the euphoria and prices higher.
This is because Coinbase’s debut “will mark the first official juncture between the traditional financial avenue and the alternative crypto path,” wrote Ipek Ozkardeskaya, a senior analyst at Swissquote. “As such, a successful addition to Nasdaq should act as endorsement of cryptocurrencies by traditional investors.”
On the price front, while the market can’t decide what exactly is going to happen, according to Sam Trabucco, a quant crypto trader Alameda, go with “the obvious trade.”
And here, the obviousness is that “In a “macro sense,” the Coinbase listing is *huge* for crypto. Everyone's talking about it in both crypto and finance circles, it represents yet another step forward for U.S. adoption, and it just sort of clearly has good implications for crypto.”
While given the fact that the crypto market is already up so much on this narrative, rationally, one would expect the market to not go up, but what’s important here is that “crypto is inefficient,” which translates to hype equals rally, Trabucco said.
The most important thing, according to him, is staying vigilant about how COIN is doing.
“Don't over-think what's obvious. Crypto is still evolving, and part of that is that the clear trade is so often the good trade, and deciding to just accept that and put it on big is often enough. Less is more!”